Australia's Allegro closes Fund III at $218m hard cap

A first close of A$250 million – the target size for the entire fund – came in October, seven weeks after launch. At that point, the GP stopped marketing to new investors. The corpus comprises contributions from existing investors, plus a number of new LPs, from Australia and overseas.

Allegro agreed to cap the sidecar at A$100 million. It will invest alongside the main fund, enabling the firm to write equity checks of A$50 million for individual deals.

Adrian Loader and Chester Moynihan established Allegro in 2004 and the firm assumed management of its first fund in 2008 as a replacement GP. This was the A$300 million ABN AMRO Capital Australia Fund II, which fully committed but every single asset was in distress. Allegro spent two years recovering value from the portfolio and, based on the reset value, generated an IRR of 25%.

The firm also operated on a deal-by-deal basis – including being appointed by creditors as a replacement sponsor for I-Med, Australia's largest private diagnostic imaging network, prior to its acquisition by EQT Partners in 2014 – before closing its second fund at A$180 million in 2015.

Allegro secured a sizeable exit from Fund II last year with the sale of Great Southern Rail (GSR) to Quadrant Private Equity for an enterprise valuation of more than A$100 million, after turning around what was an unprofitable business. As part of the deal, Allegro took a minority stake in the experiential tourism platform of which GSR is now part. The net multiple and IRR were 25.1x and 960%, respectively.

Other investments made by the fund include seismic surveyor Terrex Seismic, flooring retailer Carpet Court, drilling business JSW Australia, health food retailer Healthy Life, bus body-building company Custom Bus, and restaurant chain Pizza Hut Australia.

The final close comes less than a fortnight after another Australia-based special situations investor, Anchorage Capital Partners, closed its third fund at A$350 million. The fundraising process took about three months, and like Allegro, the vehicle was considerably oversubscribed.

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• Topics
• Australasia
• Credit/Special Situations
• Fundraising
• GPs
• Allegro Funds
• Australia
• Distress